1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
sattari [20]
3 years ago
7

Critical analysis Q16 Suppose that the Federal Reserve purchases a bond for $100,000 from Reggie Rich, who deposits the proceeds

in the Manufacturer’s National Bank. Initially, as a result of this bond purchase, the money supply will by. Suppose the required reserve ratio is 25%. As the result of Rich’s deposit, Manufacturer’s Bank will be able to extendin additional loans. As a result of this purchase by the Fed, the maximum increase in the quantity of checkable deposits that could result throughout the entire banking system is
Business
1 answer:
kkurt [141]3 years ago
3 0

Answer:

Explanation:

• Initially, As a result of the bond purchase, money supply will increase by $100000.

The reason for the increase in money supply by $100000 is because the federal reserve bought bond of $100000 from Riggie Rich. This is an expansionary policy which will lead to more money in supply.

• As a result of Rich's deposits, the bank will able to give $90000 more in additional loans.

The increase in the additional loans will be calculated by removing the reserve required ratio from the deposit.

= $100000 - (10% × $100000)

= $100000 - $10000

= $90000

• As a result of the purchase by the Federal reserve, the maximum increase in quantity of checkable deposits which could result throughtout the entire banking system will be $1000000.

The increase in checkable deposits will be the change in reserve multiplied by 1/RRR. This will be:

= $100000 x 1/10%

= $100000 × 1/0.1

= $100000 x 10

= $1000000

You might be interested in
Downtown Coffee Roasters is a premium cafe that is reputed for its superior customer service. The coffee shop also serves gourme
77julia77 [94]

Answer:

D.  C

Explanation:

As Downtown Coffee Roasters is a premium cafe which is reputed for its superior customer service. The coffee shop also serves gourmet food to its customers, which allows it to charge a premium price. Whereas, Budget Beans is a chain of coffee shops that charges the lowest price in the industry due to its self-service policy. However, Perky's Coffee Inc. has found a balance between these two strategic groups by using automated ordering to free up its employees to work as master baristas and bakers, thus focusing on creating excellent products. It charges a price slightly above that of Budget Beans. In this scenario, Perky's Coffee is following a  blue ocean strategy. In blue ocean strategy, organizations pursuit differentiation and low cost at the same time simultaneously which Perky's Coffee Inc. is doing here in this case. Perky's has created a totally new demand by following this strategy quite successfully and has made the competition totally and almost irrelevant.

8 0
3 years ago
The following information pertains to Pernell Company's pension plan. Beginning PBO: $500,000; current service cost $50,000; dis
monitta

Answer:

= $560,000

Explanation:

Given that:

  • -Beginning PBO: 500,000
  • -Current Service Cost: 50,000
  • -Discount Rate: 6%  => interest cost = 500,000*6% = 30,000
  • -Contributions by Pernell: 40,000
  • -Benefits paid to employees 25,000
  • -Loss on PBO: 5,000

As we know that service cost; gains and losses; payments to retired employees; prior service cost; interest cost; payments to employees are factors that change the balance of the PBO

So the ending balance of the PBO will be:

Beginning PBO + Current Service Cost + Interest cost Loss on PBO -Benefits paid to employees

$500,000 + $50,000+ $30,000+$5,000-$25,000

= $560,000

4 0
3 years ago
A marketing researcher is most likely to serve as a _____ in a new product development team. functional representative process m
dedylja [7]

Answer:

The correct answer is letter "A": functional representative.

Explanation:

Market Research is the process a company uses to assess the viability of a new product or service. It reveals the details of a company's target market and what consumers think about a product before it is widely released. <em>Researchers are the key functional characters in this process</em> because thanks to them the information needed to know consumers' preferences and behaviors is unveiled by them.

4 0
3 years ago
Five thousand shares of treasury stock of Marker, Inc., previously acquired at $14 per share, are sold at $20 per share. The ent
Artist 52 [7]

Answer:

d) credit to Paid-in Capital from Treasury Stock for $30,000

Explanation:

The entry for profit in sale of treasury stock is as computed below

Account Details                               Debit      Credit

Cash (5000*20)                              $100,000

     To treasury stock (5000*14)                      $70,000

     To Additional paid in capital (5000*6)      $30,000

6 0
3 years ago
Bretton, Inc., just paid a dividend of $3.15 on its stock. The growth rate in dividends is expected to be a constant 5 percent p
ArbitrLikvidat [17]

Answer:

$74.58

Explanation:

The price of share of the Bretton Inc in the given question shall be the present value of all the dividends associated with this share in the future years.

Present value of year 1 dividend=3.31(1+13%)^-1=$2.93

(3.15*1.05)

Present value of year 2 dividend=3.48(1+13%)^-2=$2.73

(3.31*1.05)

Present value of year 3 dividend=3.65(1+13%)^-3=$2.53

(3.48*1.05)

Present value of year 4 dividend=3.83(1+11%)^-4=$2.52

(3.65*1.05)

Present value of year 5 dividend=4.02(1+11%)^-5=$2.39

(3.83*1.05)

Present value of year 6 dividend=4.22(1+11%)^-6=$2.26

(4.02*1.05)

Present value of all the cash flows after 6 year=$59.22

[4.22(1+5%)/(9%-5%)]*(1+11%)^-6

Price of share                                                         $74.58                                                

6 0
3 years ago
Other questions:
  • What commodities are grown for a purpose other than food?
    15·1 answer
  • Which of the following practices should be discouraged during the problem-solving process?
    6·2 answers
  • Price discrimination is possible when a firm is able to​ ______.
    5·2 answers
  • Choose the multiple choice answers which, when strung together, create an accurate definition of gdp. the u.s. nominal gross dom
    7·1 answer
  • Which of the following is a likely way the cost of living in another country
    6·1 answer
  • Insight Guides,a line of travel books,provides travelers with background information about people's beliefs,values,and customs i
    11·1 answer
  • Departmental overhead rates are preferred over plantwide rates when: Multiple Choice The plant makes a single product. The produ
    5·1 answer
  • What does it mean if your net assets increase
    12·2 answers
  • Bankruptcy can make it difficult for you to get a loan, rent an apartment, or even get a job. True or false?
    14·1 answer
  • List three (3) Safety measures the cashier must take into consideration when doing/making a lodgment at any Financial Institutio
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!